The Singapore Democrats warned on this website on 19 Jul 11 of the uncertainty of the global economic situation:
The global financial and economic system is far from the stability that it portrays. The US is grappling with its budget deficit with President Barack Obama presently dueling with the Republicans over America’s debt ceiling. Europe is engulfed in a potentially explosive economic situation with Greece, and more worryingly Italy, as its epicentre.
Two weeks later, Deputy Prime Minister Teo Chee Hean pretty much repeated what we said. The Straits Times reported that
He noted that in the United States, for instance, a budget has not been agreed upon to allow the government to continue paying for services for its people. This will cause some uncertainties to the greenback and interest rates, which can affect the United States as well as the global economy.
In Europe, crisis in countries like Portugal and Greece are not resolved, and going ahead, there are still many serious concerns, he said.
A week later, former PAP man and presidential hopeful Dr Tony Tan said that a “perfect storm” is brewing in Europe and America that could hit Singapore. He was reported as saying
that the fiscal problems may compound the debt crisis in Europe to lead to a second dip for the global economy in the second half of the year.
The United States economy is showing signs of slowdown in growth and growing challenges in employment, and it is likely to experience a double-dip recession in the second half of the year.
Why do we pay these men millions of dollars to tell us what the SDP had pointed out?
But while Mr Teo and Dr Tan say that the troubles in the US and Europe could smack us hard, they stop there and check their thinking processes at the doorstep of the PAP house of groupthink. Instead of telling us what we can do to avert or minimise such a crisis, they embark on their usual tactic of scaring Singaporeans into getting behind the PAP.
Worse, Dr Tony Tan uses the scenario for his own selfish ends of rallying support for his bid for the presidency. After offering the perfect-storm scare, he tells voters that given his experience in the financial world he is best placed to give the Governmemt advice on how to manage such a situation.
Given recent developments, Dr Tan would do well not to remind voters of his track record. This subject, however, is another matter for another article.
For now it is important to point out what DPM Teo and Dr Tan fail to say: It is the PAP’s policies that make our economy particularly vulnerable to global economic turbulence and expose Singaporeans to the greatest ravages of such crises.
This is because our economy is hopelesssly over-reliant on foreign direct investments (FDI). Much of this investment is from the US and Europe. Even PAP MPs have sounded the caution (see here). If and when these economies falter, we catch the brunt of their downturn.
And yet, PM Lee Hsien Loong said last week in his speech at the Economic Development Board’s 50th anniversary dinner that Singapore’s economic direction will not change. In other words, Singapore will continue to do everything to court investors. He doesn’t see that this approach is the problem.
Why have we not done more to wean ourselves off our addiction to American and European investment? Why do we continue to place all our eggs in those two baskets? If we see a perfect storm building up, shouldn’t we be steering away from it rather than driving headlong into it?
The tragedy is that apart from these investments our economy has little to offer – no know-how, no innovation, no creative spark. All these decades, we kept on relying on FDI from the US and Europe and in the process neglected to cultivate our own entrepreneurs.
The SDP has said repeatedly that we need to be less dependent on FDI and more reliant on our own creative skills. We have a talented population which has not been able to develop because of the PAP’s monopoly of the domestic business sector. As a result, many enterprising and talented Singaporeans have emigrated for more open economies where their skills and ambitions are not stifled.
What Singaporeans need is less of our ministers echoing the SDP, and more of the courage to act in the interest of the people instead of their own party.